Mumbai, Dec. 9: The Reserve Bank of India (RBI) has given the go-ahead to Delhi-based Punjab National Bank (PNB) to divest its holding in PNB Gilts below 51 per cent.
PNB Gilts today informed the stock exchanges that while a permission has been sought from the central bank for divestment of PNB's stake, the company has been told by the RBI that the ministry of finance, through its notification, has granted exemption to PNB from the provisions of section 19(2) of the Banking Regulation Act, 1949.
“Consequently the Reserve Bank has no objection to Punjab National Bank divesting its holding in the company from the present level of 74 per cent to 49 per cent and further to 30 per cent over the next three years from the date of notification,” the company added.
PNB Gilts recently registered an 80 per cent rise in profits at Rs 30.01 crore for the quarter ended September 30, 2002. Total income of the company rose by 43 per cent to Rs 60.16 crore.
The subsidiary has over the recent past, been focussing on relationships with mid-segments such as co-operative banks, regional and rural banks, provident funds, private sector insurance companies, corporates and trusts.
Earlier, the bank was on the lookout for strategic investors in PNB Capital Services and PNB Asset Management Company following the Reserve bank’s advice. In the case of PNB Caps, while the apex bank had advised the closure of the subsidiary in view of its losses among other reasons, PNB had urged the RBI to reconsider this suggestion and instead give its approval for the induction of a strategic partner.
Meanwhile, PNB Gilts is scouting for strategic partners including foreign banks for offering 26 per cent stake while awaiting Sebi's nod for carrying out merchant banking business.